What do Rick Ferri and Jon Luskin's give as advice?

[Trust_In_TylerDurden]

hey community,

I have been waiting for @Rick Ferri over a year, meanwhile Jon Luskin's rates have doubled. Now they are $2,895 minimum!

https://jonluskin.com/one-day-financial-review/ (he shares samples of categories of his recommendations)

What kind of recommendations are they offering in their analysis? Can someone help breakdown their analysis process in detail so I can replicate it for my use? It may not be perfect, but at-least I can get started. Are there any processes or models you can share?

I don't mind paying, but 1 year plus is starting to be a ridiculous wait time and Jon is too expensive as an option. That's why I am turning to you all and making the magic in this accessible to everyone.

Best Regards,
Ty

[Normchad]

It probably isn’t anything magical.

Personally, I feel they are each *competent* and *trust worthy* based on my observations of them over many years. I would not hesitate to recommend them. Also, the only money they get from you is the hourly fee. They won’t make extra fees by giving you bad advise.

I do personally know some other financial advisors, who I would not recommend to anybody. And they are also FINRA listed, etc.

It is very difficult to find people you can trust, who are also knowledgeable and competent.

I used a different advisor once. Upfront he said his hourly rate was $X, and he thought a detailed dive and plan would take about 10 hours. So it was over $4000. Which seems like a ton of money at first blush.

But it is a bargain, considering it as percentage of my portfolio. Most importantly though this was advise from a true professional, who was both competent and trust worthy.

When it comes to your money, you need to be certain who you’re dealing with. Using the wrong person will cost you so much more…..

[bombcar]

80% of what they can do Klangfool would do for free here, if you tell him the details.

The whole forum here can probably get pretty close to 90% of the way there, but some people really like having a knowledgeable person they can trust.

And while I'm happy to advise random strangers on the forum, I'd be less willing to advise someone close to me - but not unwilling to send them to Rick or Jon.

Also remember they're "rockstars" of this job so they will be in demand. I'm sure there are tens of advisors who can do just as well but haven't written books.

[unclescrooge]

If there is a year-long wait, then the fee is too low.

That's just simple economics.

Is the advice magical? No.

But when you hire an advisor you are not looking for a magician.

You are looking for competence, trustworthiness, education and continuity.

[jaMichael]

I think DIY and using a fee-only, advice-only advisor are both reasonable choices. At the moment, I’m not persuaded I need a $3000 or $4000 financial plan. But if I needed one, I’d go thru the hoops to get someone I really trusted like Rick Ferri, Allan Roth, or Mike Piper. One way to think about the fee: if the advisor hits on just one thing that you wouldn’t have considered on your own, that one thing may more than cover that $3000 or $4000 fee. There is also a value in peace of mind that is difficult to reduce to dollars and cents.

[Doctor Rhythm]

I think the idea of magic, secret, or special strategy / skill is antithetical to BH philosophy. The goal is competent, individualized, and low cost service -- in other words, what you would do for yourself if you were willing and able to DIY.

[dcabler]

80% of what they can do Klangfool would do for free here, if you tell him the details.

The whole forum here can probably get pretty close to 90% of the way there, but some people really like having a knowledgeable person they can trust.

And while I'm happy to advise random strangers on the forum, I'd be less willing to advise someone close to me - but not unwilling to send them to Rick or Jon.

Also remember they're "rockstars" of this job so they will be in demand. I'm sure there are tens of advisors who can do just as well but haven't written books.

Or simply reading any of a number of decent books recommended on the wiki: https://www.bogleheads.org/wiki/Book_re ... nd_reviews
There are lots of commonalities in all of those books, but it's not like each author has lock-step views on everything. One of the earliest lessons an investor can learn is that there are many roads to Dublin and ultimately, they need to choose something good enough for them, their family, and survivors.

Having the single person you can trust is, as you say, extremely important to some people. It doesn't have to be rockstars with 1+ year long waiting lists as there are plenty of similarly minded advice-only advisors out there, but I doubt even they would all give an investor exactly the same advice. They will all give you, personally, dedicated time to go through things in as much detail as you wish. You're not likely to get that level attention to detail here on the forum for all but the simplest cases and when you do, the divergence of opinions shows itself quickly. Even achieving 80% would be generous in many cases.

Cheers.

[dogagility]

That's why I am turning to you all and making the magic in this accessible to everyone.

Start a new forum thread using this format and the magic will happen for you for free. https://www.bogleheads.org/wiki/Asking_ ... _questions

[UpperNwGuy]

I don't mind paying, but 1 year plus is starting to be a ridiculous wait time and Jon is too expensive as an option. That's why I am turning to you all and making the magic in this accessible to everyone.

1. A one year wait is not ridiculous. Rick has a stellar reputation, and people line up for his services. A less famous advisor might have a shorter wait time.

2. Jon is not too expensive. His hourly rate is similar to that of other professional services.

3. The "magic" is already accessible to everyone. Have you been reading the bogleheads forum regularly? Have you been asked the bogleheads for a portfolio review? This is how you access the "magic."

[GuyInFL]

Thanks for the links. I enjoyed reading Jon's sample plans.

[Wiggums]

People interested in do it yourself investing inspired by Mr. Bogle can get a free portfolio review here. You’ll receive a variety of optIons from people with a lot of investment experience. No fancy write up provided and you can ask follow-up questions for free. No need to wait for an appointment with your favorite Boglehead. We are right here

https://www.bogleheads.org/wiki/Asking_ ... _questions

[Wanderingwheelz]

If there is a year-long wait, then the fee is too low.

That's just simple economics.

Is the advice magical? No.

But when you hire an advisor you are not looking for a magician.

You are looking for competence, trustworthiness, education and continuity.

Or… Rick isn’t working much. He’s made that clear.

I agree he could probably raise his rate, but in that fair to the customers when the reason he’s backed up because he would rather take months off drive his RV to Alaska or go hunting than be in the office?

[CyclingDuo]

People interested in do it yourself investing inspired by Mr. Bogle can get a free portfolio review here. You’ll receive a variety of optIons from people with a lot of investment experience. No fancy write up provided and you can ask follow-up questions for free. No need to wait for an appointment with your favorite Boglehead. We are right here

Looks like he did back in 2019 here: viewtopic.php?t=279615

I would echo the suggestion that if things have changed enough for him since 2019, Ty could post up again with an updated portfolio review that includes all of the changes, and include a list of new questions. Or he could simply edit and update everything in his 2019 portfolio review post, and include a reply post to get it to the top of the page with new questions for folks to respond.

CyclingDuo

[cadreamer2015]

We have used both Rick and Jon in the past. The general portfolio advice was very consistent with Bogleheads principals and thus didn't result in major changes for us. There were several areas we did make changes after talking with them both over the past 9 years. Examples I can remember off the top of my head:

1) I had previously had the same asset allocation in traditional and Roth retirement accounts. After speaking with Rick, I realized that we would be very unlikely to spend our Roth accounts in our lifetime. So we were basically investing the Roth accounts for our heirs. So our Roth accounts are now 100% equity.

2) Both Rick and Jon had useful things to say about how to think about Roth conversions, which helped me feel comfortable with our Roth conversion strategy.

3) Jon made some good points about the mutual funds I was about to inherit and advised selling more of them than I originally considered doing because they had ERs that were relatively high. He said I might consider selling almost all of them, even though there are considerable capital gains attached (they were from an irrevocable trust and did not get a step up in basis).

4) Jon also advised increasing our umbrella insurance, which we've done.

My purpose in retaining both Rick and then Jon was not so much to get their portfolio advice on a one-off basis, though I found that useful. It was primarily to have someone on board who my DW could work with should I become incapacitated or die before her.

[gavinsiu]

2) Both Rick and Jon had useful things to say about how to think about Roth conversions, which helped me feel comfortable with our Roth conversion strategy.

4) Jon also advised increasing our umbrella insurance, which we've done.

My purpose in retaining both Rick and then Jon was not so much to get their portfolio advice on a one-off basis, though I found that useful. It was primarily to have someone on board who my DW could work with should I become incapacitated or die before her.

Thanks for sharing.

This may be off topic but what did you end up as the Roth conversion strategy. This has been a low priority back of my mind item.

What rationale did they use for additional umbrella?

How did you retain the fee only advisor? Do you schedule another meeting a few years?

One interesting note. In one of the Rick Ferri interviews, Rick indicated that in the 30 years he spent as an advisor, no spouse of a customer has contacted him after the customers passing.

[RickBoglehead]

If there is a year-long wait, then the fee is too low.

That's just simple economics.

Is the advice magical? No.

But when you hire an advisor you are not looking for a magician.

You are looking for competence, trustworthiness, education and continuity.

Economics?

Supply is constrained. One person, who has chosen to limit their client base by not working fulltime.

Fee is too low? No, because supply is so constrained.

[bsteiner]

I have been waiting for @Rick Ferri over a year, meanwhile Jon Luskin's rates have doubled. Now they are $2,895 minimum!

https://jonluskin.com/one-day-financial-review/ (he shares samples of categories of his recommendations)

What kind of recommendations are they offering in their analysis? Can someone help breakdown their analysis process in detail so I can replicate it for my use? It may not be perfect, but at-least I can get started. Are there any processes or models you can share?

I don't mind paying, but 1 year plus is starting to be a ridiculous wait time and Jon is too expensive as an option. That's why I am turning to you all and making the magic in this accessible to everyone.

$2,895 initially plus $350 an hour thereafter is far from expensive compared to paying 1% a year to someone much less knowledgeable (not that you would necessarily do that).

[GaryA505]

If there is a year-long wait, then the fee is too low.

That's just simple economics.

Is the advice magical? No.

But when you hire an advisor you are not looking for a magician.

You are looking for competence, trustworthiness, education and continuity.

Or… Rick isn’t working much. He’s made that clear.

I agree he could probably raise his rate, but in that fair to the customers when the reason he’s backed up because he would rather take months off drive his RV to Alaska or go hunting than be in the office?

This illustrates why I'm reluctant to rely on any advisor that is a "one man show". They will retire, maybe when you are older and need them the most. I'm not sure what the solution would be, as I wouldn't pay an AUM fee either. What's left? I've looked at companies like Abundo Wealth (https://www.abundowealth.com) that have multiple advisors but wonder how long they will stay in business. Are there any others?

[ObliviousInvestor]

Re the difference in price between Rick's and Jon's services, they have each told me in conversation that the reason is because Jon addresses a broader range of topics during the review. (I don't know the precise details. I imagine you can find that on their respective websites.)

I agree with those above who indicate that there's no magic. As for myself, I always try to make it clear to prospective clients that there's no magic. And there are other people who can do the same work that I do. I would bet that Rick or Jon would say something similar.

I do sincerely believe that there's a difference though between what you'll get from a financial professional and what you'll get in a thread here. (And to be clear, I say that as somebody with a deep respect and appreciation for all of the value that people share in discussions here.) For instance, I might spend about 8 hours for a typical engagement (it varies somewhat, as you would imagine, from one client to another). And that's without even getting into investment advice, as I'm not an RIA. I'm reviewing your most recent tax return, Social Security statements, and investment accounts. I'm using financial planning software for the analysis. And I'm often researching state-specific tax planning topics.

It's just a greater level of depth than you're going to get in a discussion here. Still no magic, just a different level of depth.

On Jon's website he indicates that he typically spends 6-8 hours on an engagement. Again, just a greater level of depth.

That definitely doesn't mean that services like this are a good fit for everybody. They're not. And even for people for whom such services are a good fit, it's often the case that they're only a good fit at specific times in their lives.

[aristotelian]

Ferri is a published author with several books on investing and planning. Luskin is published as well. You can probably get an idea of what they will say by reading their stuff. Also a lot cheaper than hiring them.

[ObliviousInvestor]

This illustrates why I'm reluctant to rely on any advisor that is a "one man show". They will retire, maybe when you are older and need them the most.

This is a good point. Another thing I always point out as a downside of working with a solo practitioner is that sometimes that person gets sick, goes on vacation, etc. If somebody emails me and I'm simply not looking at email that day, they're going to be waiting. There's nobody else in the office to handle the question.

[student]

hey community,

I have been waiting for @Rick Ferri over a year, meanwhile Jon Luskin's rates have doubled. Now they are $2,895 minimum!

https://jonluskin.com/one-day-financial-review/ (he shares samples of categories of his recommendations)

What kind of recommendations are they offering in their analysis? Can someone help breakdown their analysis process in detail so I can replicate it for my use? It may not be perfect, but at-least I can get started. Are there any processes or models you can share?

I don't mind paying, but 1 year plus is starting to be a ridiculous wait time and Jon is too expensive as an option. That's why I am turning to you all and making the magic in this accessible to everyone.

Best Regards,
Ty

I took a look at the samples and paid more attention to the one that is applicable to me, single. While the report for a single person is good, most are generic information. I feel that what were said in the report are something that I am aware of anyway. Of course, now there is a report for one to reference. Currently I am using Planvision because it is inexpensive. It is about $300 the first year. After the first year, it is only about $100 per year. (First year is more.) It comes with eMoney, which is not as good as I thought. So I value eMoney at $50. If I get answers for a couple of question a year, I think it is already worth $100. If I don't ask any question, $100 for eMoney is still an acceptable deal.

In general, I think unless someone is in an unusual situation, there is no need to go for an expensive advisor. So right now, I am sticking with planvision. However, if I become less capable as I get old, I may use an advisor that provide a more comprehensive service.

[student]

If there is a year-long wait, then the fee is too low.

That's just simple economics.

Is the advice magical? No.

But when you hire an advisor you are not looking for a magician.

You are looking for competence, trustworthiness, education and continuity.

Or… Rick isn’t working much. He’s made that clear.

I agree he could probably raise his rate, but in that fair to the customers when the reason he’s backed up because he would rather take months off drive his RV to Alaska or go hunting than be in the office?

This illustrates why I'm reluctant to rely on any advisor that is a "one man show". They will retire, maybe when you are older and need them the most. I'm not sure what the solution would be, as I wouldn't pay an AUM fee either. What's left? I've looked at companies like Abundo Wealth (https://www.abundowealth.com) that have multiple advisors but wonder how long they will stay in business. Are there any others?

Abundo Wealth looks interesting. Now at about $2,200 a year in subsequent years, it is abiut 22 times as much as Planvision. I looked at the FAQ section, it does seem to provide more service than Planvision but probably not 22 times at much. In any case, this is a place that is worth considering. Here is another place that charge a low fee. https://www.marlinfinancialadvisors.com/ I have no experience with than other than took a look at a couple of his YouTube videos.

[cadreamer2015]

This may be off topic but what did you end up as the Roth conversion strategy.

Our Roth conversion strategy has been to watch two targets: 1) try to keep income about flat from before RMDs to after RMDs. So don't convert so much in any one year so that once RMDs start there would be a big drop in income. and 2) Avoid the second tier of IRMAA penalties. I know this is probably the IRMAA tail wagging the dog, but I just don't want to pay so much for my Medicare. In practice this means we are in the 24% bracket both before and after RMDs.

Some have advocated converting up to the top of the 24% bracket, but I couldn't stomach the tax and IRMAA hit.

[ObliviousInvestor]

I've looked at companies like Abundo Wealth (https://www.abundowealth.com) that have multiple advisors but wonder how long they will stay in business. Are there any others?

Timothy Financial is a bigger hourly-only firm.
https://timothyfinancial.com/

The owner (Mark Berg) was recently on the Kitces podcast. I'd enthusiastically recommend listening. They discuss a variety of things Bogleheads might find interesting, including the economics of an hourly practice. It's pretty clear to anybody running such a practice that many people have a wildly inaccurate idea of the level of income that comes from a given hourly rate.
https://www.kitces.com/blog/mark-berg-t ... -referral/

Michael: So I have to ask, as you've seen and scaled this model so well, why do you think there aren't more big hourly firms? What's holding everyone else or the rest of the industry back?

Mark: That's a great question. I think I'd mentioned a few times earlier, these myths. I think there's a lot of misperceptions about hourly, “Hourly only works with middle income” or “Hourly discourages clients from asking advice”, or “You're not going to build a relationship, it's all transaction-based.” All of those are certifiable myths. We build amazing relationships with our clients, just like every other advisor does.

So I feel that the myths are largely what holds advisory firms back. They typically are starting at too low of an hourly rate, $200/hour or $220. You just do the math. You can see why it creates a struggle to build a profitable firm.

Michael: I was going to say, a lot of this feels, to me, just what happens when you get the hourly rate 'right' reasonable in the first place, right? If you took all of the stuff that you're doing and you did it at $250/hour instead of $350/hour, you’d chop your revenue by almost 1/3 and your margins are 25%.

So if you bill $250/hour, you'd be slightly losing money every year. When you bill $350/hour, it's a wonderfully healthy profit margin that you can reinvest and grow into. And it does strike me. I feel like there's a lot of firms out there, they're trying really hard to figure out how to serve a wider base of clients and how to do it profitably and efficiently on models like this.

[gavinsiu]

This illustrates why I'm reluctant to rely on any advisor that is a "one man show". They will retire, maybe when you are older and need them the most. I'm not sure what the solution would be, as I wouldn't pay an AUM fee either. What's left? I've looked at companies like Abundo Wealth (https://www.abundowealth.com) that have multiple advisors but wonder how long they will stay in business. Are there any others?

Unlike an ANUM advisor, the relationship with a fee only does not need to be ongoing. The fee only advisors give your their advise for the situation you proposed to them. Should you need more help, you can contact them again or find someone else. This is more of an issue with ANUM advisor. Those who seek such an arrangement is seeking more handholding and switching out is more problematic.

[gavinsiu]

Our Roth conversion strategy has been to watch two targets: 1) try to keep income about flat from before RMDs to after RMDs. So don't convert so much in any one year so that once RMDs start there would be a big drop in income. and 2) Avoid the second tier of IRMAA penalties. I know this is probably the IRMAA tail wagging the dog, but I just don't want to pay so much for my Medicare. In practice this means we are in the 24% bracket both before and after RMDs.

Some have advocated converting up to the top of the 24% bracket, but I couldn't stomach the tax and IRMAA hit.

Thanks, I had a similar strategy but wonder how far to convert to in tax bracket-wise.

[cadreamer2015]

Thanks, I had a similar strategy but wonder how far to convert to in tax bracket-wise.

I’ve concluded that there are so many unknowns about calculating an “optimal” Roth conversion strategy that it is a fool’s errand. I’m hoping for good enough rather than optimal.

[ObliviousInvestor]

This illustrates why I'm reluctant to rely on any advisor that is a "one man show". They will retire, maybe when you are older and need them the most. I'm not sure what the solution would be, as I wouldn't pay an AUM fee either. What's left? I've looked at companies like Abundo Wealth (https://www.abundowealth.com) that have multiple advisors but wonder how long they will stay in business. Are there any others?

Unlike an ANUM advisor, the relationship with a fee only does not need to be ongoing. The fee only advisors give your their advise for the situation you proposed to them. Should you need more help, you can contact them again or find someone else. This is more of an issue with ANUM advisor. Those who seek such an arrangement is seeking more handholding and switching out is more problematic.

What does ANUM mean in this context? Do you mean AUM (Assets Under Management)? Advisors who charge on an AUM basis do fall in the "fee only" category, if they don't charge commissions. Do you maybe mean "advice only" rather than fee only?

[tibbitts]

Our Roth conversion strategy has been to watch two targets: 1) try to keep income about flat from before RMDs to after RMDs. So don't convert so much in any one year so that once RMDs start there would be a big drop in income. and 2) Avoid the second tier of IRMAA penalties. I know this is probably the IRMAA tail wagging the dog, but I just don't want to pay so much for my Medicare. In practice this means we are in the 24% bracket both before and after RMDs.

Some have advocated converting up to the top of the 24% bracket, but I couldn't stomach the tax and IRMAA hit.

Thanks, I had a similar strategy but wonder how far to convert to in tax bracket-wise.

I think it might matter whether the next bracket is a 2% jump or an 8% jump, but the limit might not be a tax bracket but might be IRMAA or some similar limit where going over a little matters. In any case you can use software to optimize for your assumptions; unfortunately software doesn't exist that will tell you whether your assumptions are correct.

As for IRMAA or the 20% cap gains bracket or SS taxation (I know, not likely all three for the same person): it's important to remember that they apply to one year. Part of the conversion story can be swapping a higher marginal rate and higher IRMAA, cap gains etc. for one year in exchange for lower amounts for many years into the future. So... you might see a payback if "many years" is 40, or if you're investing for another (wealthy) generation, but maybe not so much if you die as your finger is lifting off the "convert" button.

[bombcar]

This illustrates why I'm reluctant to rely on any advisor that is a "one man show". They will retire, maybe when you are older and need them the most. I'm not sure what the solution would be, as I wouldn't pay an AUM fee either. What's left? I've looked at companies like Abundo Wealth (https://www.abundowealth.com) that have multiple advisors but wonder how long they will stay in business. Are there any others?

No joke I'm honestly considering instructions in my will that tell my wife / kids to first create an account on Bogleheads.org and post ...

[WhyNotUs]

hey community,

What kind of recommendations are they offering in their analysis? Can someone help breakdown their analysis process in detail so I can replicate it for my use? It may not be perfect, but at-least I can get started. Are there any processes or models you can share?
Best Regards,
Ty

I have only done Planvision so I cannot speak from experience with Jon or Rick. I did look at their info before making my choice so I studied it a bit. My situation is relatively simple, have been working part time and traveling for about 10 years and slowly stopping work but am self-employed so I can only work on projects that are of interest to me and actually enjoy the work. Our balance of pre-tax and taxables investments is such that Roth conversion are a minor consideration. We spent just minutes talking with Planvision about out holdings, which are almost all VTSAX and cds and HYSA.
They are placed in mostly efficient types of accounts for the type investment. The focus of my interaction was testing the retirement distribution that I was projecting and I received a couple useful tips. A modest tip can be worth much more than the price of the service with Rick or Jon if your accounts are larger.

It sounds like you have already looked at John Luskin's samples so that should give you a pretty good start on what he does. As you can see from the samples, there are standard items and there are items that are unique to your situation. Perhaps a good start for you is to determine what you want to have another set of eyes on. Like Rick, he is going to encourage you to have a relatively simple index-based investments and recommend which accounts make the most sense.

Rick seems mostly interested in your investment plan- asset allocation and getting investments in the right type of accounts. He offered a core portfolio on his site last time I looked.

To me, if you have a three fund or so portfolio and you already know which type of accounts they are best suited for, an emergency fund, and are saving enough to achieve your goals, then spending whatever they charge may just be confirmation on your plan. It would not surprise me if they had a tip or two to enhance your plan that would justify the expense.

If you just want a portfolio review, there is usually good advice here.

As a DIY, there are tools like Open Social Security, Pralana (free version), FIREcalc that will give you something to work on and alloow you to ask better questions.

For people with very large retirement accounts, large inherited IRAs, upcoming business or investment real estate sales, trusts, RSU grants, etc. none of these options may suffice and a CPA may be a good relationship to pursue for tax management.

Really comes down to what your needs are. To quote your namesake:
“How much can you know about yourself, if you’ve never been in a fight? I don’t wanna die without any scars.”

[gavinsiu]

What does ANUM mean in this context? Do you mean AUM (Assets Under Management)? Advisors who charge on an AUM basis do fall in the "fee only" category, if they don't charge commissions. Do you maybe mean "advice only" rather than fee only?

ANUM does mean asset under management. There are several ways to get pay for advisor service. The two main ways is to pay by the hour or ANUM. The level of service you can expect is going to be different.

For ANUM advisor, you can expect a higher degree of service. You can call them up and tell them that you have $100K to invest and they will dutifully take that money and invest it. They will rebalance and handle RMD. If you freak out because the stock market crash, you can call them up and they will walk you from the ledge. For that level of service, they are more expensive. A typical rate is around 1%. You can get the cost down to something like around Vanguard PAS at around 0.35%.

The other alternative is pay someone by the hour typically call Fee only advisor who get paid by the hour. They will review your portfolio and make recommendations. You are then responsible for doing the legwork of implementing the plan. If you freak out, you will probably not be able to reach them especially if they are booked years in advance. Although if you get an advisor that isn't so famous, may be you will be able to hire them to talk you off the ledge. The cost is typically around $100-400 an hour. I think Rick, being in demand charges around $400.

Despite the high hourly rate, the fee onliy will be cheaper. A $1M portfolio will cost $3500 if you use Vanguard PAS and around $10K for a typical advisor. Even at expensive hourly rate of $400, it will be way underneath the typical 1% fee.

I would suspect that you would probably get a simpler portfolio with a fee only advisor. Many ANUM advisor have a tendency to create an overly complicated portfolio with 15 ETF mainly because they want to show their worth so that their client don't fire them because they got a 3 fund portfolio that's too simple.

This brings me to the next point you brought up about continuity. You connection with the advisor is weaker for fee only. Suppose the advisor retires, then you can just hire another one. You are doing the work, so it's not urgent. If you pay some ANUM, you depend on them to manage your portfolio, what if the advisors dies or retires?

Ultimately it boils down to what you are looking for. For me, I don't want to pay that much money for someone to do portfolio management on a portfolio that isn't going to change all that much. I may pay for advise on specific products, but there are people who rather pay someone to deal with everything.

[gavinsiu]

I think it might matter whether the next bracket is a 2% jump or an 8% jump, but the limit might not be a tax bracket but might be IRMAA or some similar limit where going over a little matters. In any case you can use software to optimize for your assumptions; unfortunately software doesn't exist that will tell you whether your assumptions are correct.

As for IRMAA or the 20% cap gains bracket or SS taxation (I know, not likely all three for the same person): it's important to remember that they apply to one year. Part of the conversion story can be swapping a higher marginal rate and higher IRMAA, cap gains etc. for one year in exchange for lower amounts for many years into the future. So... you might see a payback if "many years" is 40, or if you're investing for another (wealthy) generation, but maybe not so much if you die as your finger is lifting off the "convert" button.

Do you have recommended software that was helpful. I was thinking of using New Retirement, but various post indicated that it is not particular good at that task.

[smitcat]

Our Roth conversion strategy has been to watch two targets: 1) try to keep income about flat from before RMDs to after RMDs. So don't convert so much in any one year so that once RMDs start there would be a big drop in income. and 2) Avoid the second tier of IRMAA penalties. I know this is probably the IRMAA tail wagging the dog, but I just don't want to pay so much for my Medicare. In practice this means we are in the 24% bracket both before and after RMDs.

Some have advocated converting up to the top of the 24% bracket, but I couldn't stomach the tax and IRMAA hit.

Thanks, I had a similar strategy but wonder how far to convert to in tax bracket-wise.

You can run your own future scenarios for review with either RPM or Pralana. Either will allow you to model whatever you want.
RPM is free and a bit more transparent but has no 'auto optimization' options - you do the selections and iterative work.
Pralana is $100 first year ($50 after if needed) and a bit less transparent but does have a number or 'auto optimization' options such as drawdown strategy and Roth conversions.

[ObliviousInvestor]

What does ANUM mean in this context? Do you mean AUM (Assets Under Management)? Advisors who charge on an AUM basis do fall in the "fee only" category, if they don't charge commissions. Do you maybe mean "advice only" rather than fee only?

ANUM does mean asset under management.

What does the N stand for?

[tibbitts]

What does ANUM mean in this context? Do you mean AUM (Assets Under Management)? Advisors who charge on an AUM basis do fall in the "fee only" category, if they don't charge commissions. Do you maybe mean "advice only" rather than fee only?

ANUM does mean asset under management.

What does the N stand for?

Good question: I would have guessed "Assets Not Under Management."

[tibbitts]

I think it might matter whether the next bracket is a 2% jump or an 8% jump, but the limit might not be a tax bracket but might be IRMAA or some similar limit where going over a little matters. In any case you can use software to optimize for your assumptions; unfortunately software doesn't exist that will tell you whether your assumptions are correct.

As for IRMAA or the 20% cap gains bracket or SS taxation (I know, not likely all three for the same person): it's important to remember that they apply to one year. Part of the conversion story can be swapping a higher marginal rate and higher IRMAA, cap gains etc. for one year in exchange for lower amounts for many years into the future. So... you might see a payback if "many years" is 40, or if you're investing for another (wealthy) generation, but maybe not so much if you die as your finger is lifting off the "convert" button.

Do you have recommended software that was helpful. I was thinking of using New Retirement, but various post indicated that it is not particular good at that task.

There have been issues reported with NR but there is a free trial so you could test it. There have been some positive comments about ProjectionLab. No votes up or down for VeriPlan that I know of so you could be breaking new ground there. You can get free access to the tax management (conversion) portions of Right Capital through Kevin Lum's Youtube posts. Pralana and RPM are common solutions suggested here. VeriPlan and Pralana apparently require real Excel (vs. freeware spreadsheet software) and neither has a trial that I know of. The next version of Pralana is planned to be a web app vs. a spreadsheet and might (or not) be available before too long.

[student]

I think it might matter whether the next bracket is a 2% jump or an 8% jump, but the limit might not be a tax bracket but might be IRMAA or some similar limit where going over a little matters. In any case you can use software to optimize for your assumptions; unfortunately software doesn't exist that will tell you whether your assumptions are correct.

As for IRMAA or the 20% cap gains bracket or SS taxation (I know, not likely all three for the same person): it's important to remember that they apply to one year. Part of the conversion story can be swapping a higher marginal rate and higher IRMAA, cap gains etc. for one year in exchange for lower amounts for many years into the future. So... you might see a payback if "many years" is 40, or if you're investing for another (wealthy) generation, but maybe not so much if you die as your finger is lifting off the "convert" button.

Do you have recommended software that was helpful. I was thinking of using New Retirement, but various post indicated that it is not particular good at that task.

There have been issues reported with NR but there is a free trial so you could test it. There have been some positive comments about ProjectionLab. No votes up or down for VeriPlan that I know of so you could be breaking new ground there. You can get free access to the tax management (conversion) portions of Right Capital through Kevin Lum's Youtube posts. Pralana and RPM are common solutions suggested here. VeriPlan and Pralana apparently require real Excel (vs. freeware spreadsheet software) and neither has a trial that I know of. The next version of Pralana is planned to be a web app vs. a spreadsheet and might (or not) be available before too long.

What is RPM (I forgot)? Right now I am playing with Right Capital. (I paid a one-time $299 fee via an advisor for the promised lifetime access of the software + retirement videos on how to best use the software.) I will take a closer look at NewRetirement and ProjectionLab. PL seems to have a very active user base via discord.

[tibbitts]

What is RPM (I forgot)? Right now I am playing with Right Capital. (I paid a one-time $299 fee via an advisor for the promised lifetime access of the software + retirement videos on how to best use the software.) I will take a closer look at NewRetirement and ProjectionLab. PL seems to have a very active user base via discord.

https://www.bogleheads.org/wiki/Retiree_Portfolio_Model

[student]

What is RPM (I forgot)? Right now I am playing with Right Capital. (I paid a one-time $299 fee via an advisor for the promised lifetime access of the software + retirement videos on how to best use the software.) I will take a closer look at NewRetirement and ProjectionLab. PL seems to have a very active user base via discord.

https://www.bogleheads.org/wiki/Retiree_Portfolio_Model

Thanks.

[gavinsiu]

What does the N stand for?

My bad, spelling is not my strong suit. Its AUM

[unclescrooge]

If there is a year-long wait, then the fee is too low.

That's just simple economics.

Is the advice magical? No.

But when you hire an advisor you are not looking for a magician.

You are looking for competence, trustworthiness, education and continuity.

Economics?

Supply is constrained. One person, who has chosen to limit their client base by not working fulltime.

Fee is too low? No, because supply is so constrained.

If you increase price demand will fall.

That's econ 101.

[RickBoglehead]

If there is a year-long wait, then the fee is too low.

That's just simple economics.

Is the advice magical? No.

But when you hire an advisor you are not looking for a magician.

You are looking for competence, trustworthiness, education and continuity.

Economics?

Supply is constrained. One person, who has chosen to limit their client base by not working fulltime.

Fee is too low? No, because supply is so constrained.

If you increase price demand will fall.

That's econ 101.

Price Elasticity

Increased prices typically result in lower demand, and demand increases generally lead to increased supply; however, the supply of different products responds to demand differently, with some products' demand being less sensitive to prices than others.

[mtwhmemn]

We’ve used Jon twice, the first time was the whole review and the second time was a short follow up about a year later.

The bottom line for us was “you don’t know what you don’t know”.

Make an appointment.

[abuss368]

Hi Bogleheads -

In my opinion, having a qualified and knowledge advisor as a resource can make a difference in the outcome of a portfolio.

Investing should be simple but the journey of life and the many financial decisions that must be made may not be.

There is impact.

Best.
Tony

[Box of Rain]

We’ve used Jon twice, the first time was the whole review and the second time was a short follow up about a year later.

The bottom line for us was “you don’t know what you don’t know”.

Make an appointment.

So, can anyone give examples of some of the advice they've received from a financial advisor that falls into the category of "you don’t know what you don’t know -- until the advisor told us about it"?

If we take out advice about roth conversions and social security claiming, which I can figure out for myself, what kind of wisdom do these advisors share with you that you did not know ahead of time?

[exodusing]

If there is a year-long wait, then the fee is too low.

That's just simple economics.

Is the advice magical? No.

But when you hire an advisor you are not looking for a magician.

You are looking for competence, trustworthiness, education and continuity.

Economics?

Supply is constrained. One person, who has chosen to limit their client base by not working fulltime.

Fee is too low? No, because supply is so constrained.

If you increase price demand will fall.

That's econ 101.

Price Elasticity

Increased prices typically result in lower demand, and demand increases generally lead to increased supply; however, the supply of different products responds to demand differently, with some products' demand being less sensitive to prices than others.

Which doesn't contradict "If you increase price demand will fall", if that's what you intended? A higher price will result in lower demand, although it's hard to say in advance how much lower (that depends on price elasticity). Lower demand means shorter wait times for those who want the service.

Might Rick have motivations other than maximum income or shorter wait times for some? Given his familiarity with basic economics, probably yes.

[mtwhmemn]

We’ve used Jon twice, the first time was the whole review and the second time was a short follow up about a year later.

The bottom line for us was “you don’t know what you don’t know”.

Make an appointment.

So, can anyone give examples of some of the advice they've received from a financial advisor that falls into the category of "you don’t know what you don’t know -- until the advisor told us about it"?

If we take out advice about roth conversions and social security claiming, which I can figure out for myself, what kind of wisdom do these advisors share with you that you did not know ahead of time?

One of the main reasons we did it doesn't answer your question, but I'll get to a few reasons after I say this:

My wife and I met with (conference call) our adviser together to discuss our situation. Since I take care of everything financial in our lives, I wanted my wife to have an overview of our situation and meet our advisor in case I die sooner than later so she will have someone to lean on if I kick the bucket next week. Now that we've talked to our advisor all together a couple of times, my wife would be comfortable calling him and moving forward without me. Invaluable.

As far as specific information we learned, "you don’t know what you don’t know” things...well that'll definitely vary for everyone. I came to the realization that the point of all the savings and optimization isn't to accumulate or have the ability to spend the most money, but to optimize for risk. Risk management was a big part of our outcome. Beef up our umbrella policy, bought a smallish SPIA with a part of my bond allocation...stuff like that.

Also, we bought LTCi policies for both of us at 59 which I never thought I'd do and still don't know if I'll continue to pay for them forever but we barely qualified so it was then or never. We can afford the premiums easily even if/when they go up and it is just part of the risk management aspect I came believe the correct path forward.

Retiring is just way more complicated than the acquisition phase. I mean one could just have bought the S&P every month when young and then maybe 5-10 years out from retirement start to mix in some Total Bond/Total Int'l Index. But retirement mixes in so much more. LTCi, SPIAs, early retirement ACA/MAGI stuff, when to take SS, etc....

The order of what to spend first and why you should have all equites in Roth and no bonds in taxable...that kind of stuff too if you need guidance.

It was just good to have a 2nd set of eyes on our whole financial life!

I really never thought I'd buy LTCi or a SPIA but here we are! YMMV

[Box of Rain]

Thanks for replying. I appreciate it.
Overall, it does not sound like something I would want, hiring an advisor. But I can see how some people would want to. I mean I can understand why some people would want to. And then there are people like some of my family members, who are the reason there is a financial advising industry. They don't read about financial stuff, they don't watch Bogleheads conference videos, they don't come to this forum and learn and ask questions and they don't want to. To me, the thought of not being the one who learns and figures things out and is totally in control of all aspects of my finances would be horrifying to me. It is true that we do not know what we do not know, so I have tried to find out what I don't know, and I will continue that effort, but for now I think I know what I need to know. So I do it myself. For some people in my family, with all due love and respect they just do not want to know. They want someone to do it for them. So, I can see why the industry exists. For the Bogleheads people who just want someone to look over their plans, I think the industry calls them "confirmers" or something like that, I am not sure that these advisors really would add much value for the cost, but it sounds like you got some value, so I maybe that's one of the things that I don't know that I don't know.